India to slash European car tariffs to 40 percent in trade deal

Sunday 25 January 2026 - 16:30

By: Sahili Aya

India to slash European car tariffs to 40 percent in trade deal

India is set to reduce tariffs on European car imports from 110% to 40% as part of a historic trade agreement with the European Union, sources told Reuters. The move marks the largest opening of India’s automotive market to European manufacturers to date.

Under the agreement, which could be signed as early as Tuesday, the Indian government will initially cut duties on a limited number of European vehicles priced above €15,000. Reports indicate that tariffs could eventually fall further, to as low as 10%, making it easier for companies such as Renault, Stellantis, Volkswagen, Mercedes-Benz, and BMW to access the Indian market.

The trade deal, years in the making, represents a milestone in EU–India relations and is expected to strengthen economic ties between the two major global economies.